July unemployment at 4.5% despite drop in factory jobs

The unemployment rate held at 4.5 percent in July, near a 28-year low, as the robust American job market thrived despite a huge temporary drop in factory jobs reflecting the General Motors strikes.

The seasonally adjusted rate matched June's and was only slight-ly higher than the 4.3 percent rate in May and April, the lowest since 1970, the Labor Department said Friday."If you look through the GM strike, it shows the economy is continuing to power forward strong-ly," said economist Mark Zandi of Regional Financial Associates in West Chester, Pa. "So far, the weakness in manufacturing has not bled into the rest of the economy."

The report reassured Wall Street investors worried that Asia's economic slump would bring U.S. growth to a near standstill. The Dow Jones industrial average shot up more than 100 points by early afternoon.

But traders used the surge as an opportunity to remove money from the market and the average closed at 8,598, up 20 points. With that, and gains on Wednesday and Thursday, the average has recouped nearly two-thirds of Tuesday's 299-point plunge.

Net job growth in July - at 66,000, the weakest in two and a half years - was restrained by a drop of 176,000 in manufacturing, the largest since near the end of the 1981-82 recession.